GRAINS-U.S. corn soars on firm cash market, technicals

Mon May 13, 2013 5:14pm EDT

Related Topics

* Spot May corn, soy contracts surge a day ahead of expiry
    * Late-week showers seen further stalling U.S. corn planting
    * Buying accelerates as July corn tops last week's high
    * U.S. wheat exports may exceed USDA's full-year estimate

 (Updates with weekly USDA crop progress figures)
    By Julie Ingwersen
    CHICAGO, May 13 (Reuters) - U.S. corn futures advanced on
Monday on firm cash markets and concerns that another round of
showers would stall planting late this week in the U.S. Midwest,
where producers are scrambling to catch up after a cool, wet
spring delayed field work.
    "We'll definitely see pretty healthy plantings the first
half of this week, then delays again beginning next weekend,"
said John Dee, meteorologist at Global Weather Monitoring.
    Wheat rose too, rebounding from losses on Friday following a
bearish monthly supply and demand report issued by the U.S.
Department of Agriculture.
    At the Chicago Board of Trade, most-active July corn 
settled up 19-1/4 cents at $6.55-1/2 per bushel. July soybeans
 ended up 20-1/4 cents at $14.19-1/4 a bushel, and July
wheat was up 5-1/2 cents at $7.09-3/4 a bushel.
    Technical buying lent support, with most-active July corn
 surpassing last week's high of $6.52-1/2 and briefly
trading above its 50-day moving average of $6.58-1/4. 
    
    FIREWORKS IN MAY CONTRACTS AHEAD OF EXPIRATION
    The thinly traded May contracts in corn and soybeans rose
sharply ahead of their expiration on Tuesday, supported by tight
supplies of old-crop U.S. supplies.
    May corn settled up 30-1/4 cents at $7.18 after
reaching $7.22-1/2, the highest spot corn price since USDA's
March 28 quarterly stocks report sent prices tumbling.
    Spot May soybeans ended up 32-3/4 cents at $15.21
after touching $15.27-1/4, the highest spot price in six months.
    The CBOT has reported no deliveries of soybeans, corn or
soymeal during the May delivery cycle, a sign that commercial
grain handlers see more value in selling into the cash market
than in delivering against futures.
    "I don't know how anyone short in May is going to get out
other than buy their way out, and that could get pretty tense,"
said Roy Huckabay at the Linn Group, a Chicago brokerage.
    Planting delays added to the strength in the cash market,
analysts said. Producers may be reluctant to sell the last of
their old-crop harvest until they feel confident about prospects
for the new crop, said Dan Cekander, grain analyst with Newedge
USA in Chicago. 
    After the close of the market, the USDA said the U.S. corn
crop was 28 percent planted, up from 12 percent a week earlier,
but slightly below an average of trade estimates for 29 percent.
The figure lagged the five-year average pace of 65
percent. 
    USDA reported soybean planting progress at 6 percent, up
from 2 percent the previous week, but trailing an average of
trade estimates for 10 percent, and behind the five-year average
of 24 percent.
    "Psychologically, this (week) is a critical one for getting
corn planted. Many analysts claim corn seeded after mid-May
tends to see lower yields," said Karl Setzer, a commodity
trading adviser at MaxYield Cooperative in West Bend, Iowa.
    CBOT December corn, representing the U.S. 2013
harvest, settled up 9-3/4 cents at $5.39-1/4.
    The contract hit a two-week low of $5.22-3/4 on Friday after
the USDA forecast a record crop that would bolster U.S. stocks
to more than 2 billion bushels at the end of next season, above
trade expectations despite reduced yields due to late planting.
    U.S. soybean production was projected at a record 3.390
billion bushels with 2013/14 ending stocks more than doubling to
265 million bushels from the 125 million estimated for the end
of this season. The forecast was above trade expectations for
236 million bushels.
    
    WHEAT PRICES ADVANCE
    Wheat prices followed corn higher, clawing back some of
Friday's losses following USDA's larger-than-expected 2013/14
world stocks forecast.
    Dealers said the market also derived support from an
improving outlook for U.S. exports.
    "With European supplies dwindling, U.S. wheat is favorably
positioned in the export market, and U.S. exports are now
starting to outpace the levels needed to reach the USDA's
full-year estimates," Morgan Stanley said in a market note.
    USDA in its crop progress report said 32 percent of the U.S.
winter wheat crop was rated in good to excellent condition,
unchanged from the previous week.
    
 Prices at 2:25 p.m. CDT (1925 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  655.50    19.25   3.0%    1.4%
 CBOT soy                  1419.25    20.25   1.5%   18.4%
 CBOT meal                  415.10     8.30   2.0%   34.2%
 CBOT soyoil                 49.61     0.38   0.8%   -4.8%
 CBOT wheat                 709.75     5.50   0.8%    8.7%
 CBOT rice                 1543.00    18.00   1.2%    5.6%
 EU wheat                   210.25     1.50   0.7%    3.8%
 
 US crude                    95.02    -1.01  -1.1%   -3.9%
 Dow Jones                  15,079      -39  -0.3%   23.4%
 Gold                      1432.90   -14.80  -1.0%   -8.4%
 Euro/dollar                1.2975   0.0016   0.1%    0.2%
 Dollar Index              83.2480   0.1050   0.1%    3.8%
 Baltic Freight                879       -5  -0.6%  -49.4%
 
    

 (Additional reporting by Sam Nelson in Chicago, Nigel Hunt in
London and Naveen Thukral in Singapore; editing by William
Hardy, Marguerita Choy, Jim Marshall and Peter Galloway)
FILED UNDER: